Careful what you wish for, because you just might get it.
In a nutshell, this is the advice I’d give to anyone wishing to be their own boss. Yes, it’s amazing to set your own hours. And yes, you can take as many days off as you like. But once the novelty fades out, after a few months of being self-employed, the truth never fails to appear – being your own boss is tough.
Here are 5 things you’ll have to do yourself once you leave your job and become your own boss. Are you ready?
1. Find clients so that you actually have something to work on
The million dollar question every aspiring freelancer asks me when I tell them I am my own boss – ‘but how do you find clients?’ I am not sure why, but the obstacle that prevents most people from going out on their own is their fear of selling.
If that is your fear too, that may be a sign that you are not ready yet.
If you are ready to try to sell your services, though, I have good news – selling your services online doesn’t have to be difficult. Actually, it mostly comes down to three simple steps:
· Creating a service that businesses are actually happy to pay for
· Finding out who the key decision makers are
· Determining the best way to reach out to them – or help them find you
Tailor your strategy to your personality – if you are not ready to make calls, try an email campaign. If you think starting a blog may take too long, implement a LinkedIn content strategy instead.
Whatever strategy you prefer, just make sure you create a habit of implementing it constantly. As a beginner, setting a time of the day for marketing purposes – and sticking to it no matter what – helped me to create a decent portfolio of clients in just a few months.
2. Provide all the tools you need to do your job
You wouldn’t think this is such a big deal.
Then your laptop stops working, and you are left with a hefty bill to replace it. You have to upgrade some software you absolutely need for work. Or you finally do the math on how much you are spending on business-related monthly subscriptions.
At that very moment, all of a sudden, you start thinking… This is expensive!
And it doesn’t even end there! As a freelancer, you are expected to pay for:
· Your desktop, laptop, tablet, phone and any piece of hardware you can think of
· Software, be it a one-off fee or a subscription model
· Training, if you don’t want your skill to become obsolete
· Marketing assets you need to promote your services
My take? Don’t be greedy! While it’s true that expenses can pile up pretty quickly, freelancing is usually a much cheaper option than starting an old-style business (think of brick and mortar shops as an example).
Plus, today you can find free and open-source alternatives for most software and basic business needs you might have, from illustrations for your website to productivity apps, calendars and the like.
3. Decide how much your time is worth it
Until you have so many clients that you start your own agency, as a freelancer you will be selling your time in exchange for money. When you were employed at a company, you decided how much that time was worth it when you signed the offer.
Now it’s up to you to decide what to charge.
If you are just starting out, it may be helpful to consider how much other freelancers are charging for their services. You can check out Upwork to know what the lower end is, and experienced professionals with a good following for LinkedIn to explore the higher part of the range.
Eventually, though, you will want to reverse-engineer your rate based on your income expectation – take whatever number you want to make and divide it by (weeks you want to work per year * days you want to work per week * hours you want to work per day). For most people, that number will be 1440 – 48 weeks per year, Monday to Friday, 6 hours per day of billable work.
Once you manage to charge your clients $70 per hour, you are officially a six figure freelancer.
4. Help you to maintain work-life balance and avoid burnout
I know, I know… most bosses seem to contribute to your burnout, rather than protecting you from it. Are you going to do better, though?
As a freelancer, you can go wrong in multiple ways. Are you a workaholic who’ll work as many hours as you humanly can? A night owl who can easily work from midnight to 5 AM? Or a serial procrastinator who’ll keep missing deadlines? Whatever your potential missteps, it’s your job as a freelancer to identify them early on in your journey and fix them before they become a real problem.
My tip? You can be a great boss… when you are not caught up in the action. Plan your schedule in advance and stick to it. Try productivity hacks to increase your output. Time block your days so that you know when to market your services, when to do client work, and when to just sit back and relax.
You may not feel the need to do it when you are first starting out, but your body and your mind will thank you in the long run.
5. Do your own taxes and plan for retirement
‘Who’s excited to talk about taxes?’
Sounds like the perfect way to silence a whole room of people. And after 12 years as a freelancer, I still struggle with the paperwork myself from time to time.
Unfortunately, though, invoicing, taxes and retirement are part of the freelancing package. The good news is that it doesn’t have to be that difficult.
Invoicing can easily be solved by dedicating it its own time block at the end of the last week of the month.
As long as you apply sound cash management principles, you will have the money you need when tax season comes. It won’t be pleasant, but you can take remedies like having a dedicated account for tax money, so that you don’t even see it. It was not yours anyway.
And while retirement may seem scary, you can find plenty of resources online to guide through the intricate world of retirement saving plans for freelancer, such as a SEP IRA or a solo-401k.
Worst case scenario? You can outsource the whole ordeal to bookkeepers, accountants and consultants. It may not be cheap, but it will help you focus on what you know best – doing your actual job – while professionals handle the rest for you.